The World Economy and Regional
Economies in South Asia:
Some Comments on Linkages
SUGATA BOSE
Somewhere between 'South Asia' and 'world capitalism' lies an
inter-rcgional arena of social politics and political economy.
The encounter between regional social formations and the
capitalist world economy cannot be fully understood if this
intermediate layer of interaction and exchange is overlooked.
Contrary to assumptions about older patterns of integration
being subsumed, if not obliterated, under Western-dominated
colonial capitalism, reordered ties between South Asia and
neighbouring regions to its east and west continued to be vitally
important in the nineteenth and twentieth centuries. Undoubtedly at a key, strategic level of analysis, the inter-rcgional
arena might form the intellectual meeting-ground of scholars of
'South Asia' and the 'world'.
The territoriality of regional specialists and the expansionism
of world-systems analysts have combined to keep South Asia a
world apart from broader arguments about historical change.
This concluding statement underlines the ways in which
regional social analysis has continued to be of critical importance within the context of a capitalist world economy, and
the extent to which the 'core' has constituted a major agency
of regional social transformation. More important, it suggests
how inter-regional links have sustained the social and economic
viability of 'peripheral' and 'semi-peripheral' regions, while at
the same time qualifying the dominance of the capitalist 'core'.
Relations of production and appropriation within regional
social formations form the ground level of a multi-tiered
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analysis on which any consideration of the inter-regional and
world arenas of social politics and political economy must rest.
Social structures of primary-producing (mostly agrarian)
regions vary considerably and, without a broad typology of
these structures, the question of their articulation to wider networks cannot begin to be addressed. Agrarian historians of
socio-economic regions within South Asia can advance the field
considerably by reinforcing a recent historiographical trend
which has seen a shift of emphasis from the parametric features
of economic impact—such as burden of rent, extent of indebtedness and loss of land—to relational features, which include patterns of entitlement to land, work and subsistence, and the
circuits of credit linking land to capital and South Asian
agrarian regions to the wider world.
Once South Asian agrarian economy and society were decisively connected to the West-dominated capitalist world
economy around 1820, where did the locus of historical initiative come to lie? One view would appear to suggest that it was
wrested almost wholly by the core whose rhythms and fluctuations were faithfully and helplessly reflected in the subservient
periphery. Another counters by arguing the resilience of the
regional heritage of agrarian social structure in continuing to
be able to deploy its momentum to shape historical change. It
may be best to acknowledge multiple loci of initiative of unequal power and then to identify the precise, occasionally
paradoxical, modes in which each determinant operated. The
capitalist core on the one hand dominated and impoverished
the colonial periphery, while on the other contradictions within
world capitalism opened the conditions of possibility of resistance by labour which could undermine the structures of domination at the regional and world levels. The pre-existing
relations of property and production within an agrarian region
moulded the form and impact of colonial capitalism but also set
crucial handicaps in the political contest between capital and
labour.
A couple of examples from rural eastern India, firmly tied to
the capitalist world economy from the early nineteenth century,
clearly illustrate this point. The first is the collapse of the system
of indigo production in Bengal in i860, and the second is the
end of the creditors' heyday, especially in jute-producing east
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Bengal, in 1930. Despite the same context of a general economic
crisis which formed the background to the blue mutiny, indigo
cultivation was virtually wiped out of Bengal while it entrenched itself in Bihar. The bulk of indigo was grown in
Bengal on raiyati or peasant lands. The common opposition of
peasants and landlords involved in moneylending in the rice
sector ensured that the strenuous efforts by European indigo
planters to increase raj or demesne lands at the expense of
raiyati ended m complete failure. In Bihar, by contrast, the
alliance between the maliks' or landlords' power and the
planters' money forced a massive expansion of indigo cultivation on zerat or demesne rather than assamewar or peasant lands.
The indigo planters' dominance could not be subverted in
Bihar until 1917.
Similarly, the 1930s Depression had a differential impact on
different types of agrarian social formation. The bondsnapping character of the credit crisis was most evident in the
highly monetized economy of east Bengal, where moneylending zamindars and talukdars had held distant and feeble rentcollecting rights over their peasant debtors. Peasant resistance
was most powerful and effective in delivering the coup de grace
to the relations of appropriation through debt. But since food
also moved out of the orbit of the credit market into that of the
product market, the full extent of peasant vulnerability became
clear later, during the 1943 famine. In west Bengal, where a
peasant smallholding-demesne labour complex had emerged,
continuance of grain loans in the demesne sector strengthened
the ties of dependence, while the smallholding sector suffering
from low prices and the absence of monetary credit lost much
ground to a grasping demesne sector. There were further variations in the social impact of the worldwide economic crisis on
the two other major types of agrarian structure—the plantations of north Bengal and the rich farmer-sharecropper formation of the frontier regions.
The different configurations of agrarian class structure in
specific socio-economic regions occupy, therefore, a key location
in the hierarchy of determinants that have shaped the process
of change over the long term in colonial South Asia, although
the dominance of the capitalist world economy was real and
contradictions within the upper echelons of its structure con-
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tributed to historical contingencies of far-reaching import.
Agrarian regions of South Asia were not discrete entities but
were critically dependent in the period from the mid nineteenth
century to 1930 on systems of inter-regional specialization in
the flow of capital and labour with regions in South East Asia
and the Middle East. This is an extremely important level of
analysis—important because historical webs of social and
economic relationships were strung together so closely at this
level—which has been very imperfectly investigated by scholars
concerned with the world economy and historians of agrarian
regions. While the case for integration has been strongly suggested by historical scholarship on the pre-colonial and early
colonial periods, as well as by post-World War II developments
in the domain of political economy, the analysis of linkages has
been only tentatively attempted in historical studies spanning
the century from 1850 to 1950. This has meant not only that a
strategic level of analysis has been left unaddressed, but also that
the world of the late-nineteenth and the early-twentieth
century has been allowed to be schematized into a West versus
rest dichotomy, leaving out of account rich and complex
arenas of human interaction. Even after European penetration, South and South East Asia, as well as South Asia and the
Middle East, were coherently definable inter-regional arenas
characterized by specialized flows of capital and labour, commodities and services, ideas and culture. It is important to
investigate the character and consequences of these linkages,
the ways in which disturbances in the capitalist world economy
affected inter-regional specialization, and the conditions under
which recovery and reintegration took place.
, Regional social formations and the worldwide economic
system of capitalism were to some extent, and in varying ways,
dependent on inter-regional networks. They allowed agrarian
societies to be viable for considerably longer into the twentieth
century than they might have been on their own strained
resources, and afforded Western capital the opportunity to
choose its direct spheres of operation. Flows of Indian migrant
labour and intermediary capital to South East Asia wove a
complex and integrated pattern of inter-regional links which
relieved some of the pressure on the old-settled densely populated zones of eastern India and enabled the provisioning of
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new ^concentrations of Western capital and immigrant labour
on plantations in South East Asia. The relationship forged in
the later nineteenth century between agrarian regions in India
and plantations as well as rice frontiers in South East Asia was
more than simply an interdependence of rural regimes. It
formed an important intermediate level of the complex structure of capital—holding it up, but vulnerable both to shifts in
its deltaic foundations and unhinging of support from the top.
During the 1930s Depression the pieces came apart and were
reassembled in quite different ways in the post-War era.
While the links between South and South East Asia have
received some scholarly attention, those between South Asia
and the Middle East during the century spanning 1850-1950
have been virtually ignored. Yet Western colonial capital
reordered and redirected, but did not wholly rupture, the
older ties which characterized the economy and civilization of
the Indian Ocean. From the later nineteenth century, Indian
merchants and moneylenders, both Hindu and Muslim, had
sailed under the British imperial umbrella and extended their
hold, from entrenched positions in the subcontinent, establishing sectors of economic influence, even dominance, in the Gulf.
The 1920s saw the high-water mark of Indo-Gulf trading links,
as well as the involvement of Indian capital in the pearling economies of Bahrain and Kuwait and in the bazaars of southern
Iranian ports. The 1930s slump had a scything effect on economic links between the two regions and paved the way for the
inroads made by Japan in the Middle East economic scene,
largely at the expense of British-Indian interests. It was only in
the late 1930s that a rising oil economy began to offset the
effects of the collapse in the commodities trade and the tightening of credit flows by creating a new sort of market for South
Asian products, skills and labour.
It is by tracking the fortunes and fears of Indian capital
and labour in South East Asia, the Middle East and also East
and South Africa that the nature of the Indian colonial economy can be fully grasped and the character of the Western
capitalist and colonial/para-colonial enterprise more perceptively interpreted. A subtler understanding might then also be
possible of the unities and distinctive features of the cultures and
idioms of anti-colonial resistance than that allowed by the
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perspectives of cultural exclusivists or believers of cultural
domination within the world system. It is time for South Asian
scholars to break out of the rigid mould set by the area studies
rubric and for world-systems analysts to soften and nuance
their steely schematic formulations. A via media may be found
in the study of comparisons and links underlying interregional processes in the nineteenth and twentieth centuries
which operated within a global context and for which South
Asia was such a central meeting-point. Imaginative and innovative approaches to this intermediate level of societal interactions and political economies promise to open up an exciting
new vista connecting the domain of area studies with the field
of global interdisciplinary history.